World financial crisis Part 5

The usual stuff you can read on WSWS in three minutes, but now you get to watch it for 27 minutes.

I remember as a young man after university bouncing around 2 to 3 years working at certain factories.  Let describe I saw.  

Year 1- My friends and most were buying new cars some were buying homes this a younger crowder and new people to factroy environment.  I noticed older generation somewhat less likely spend like younger crowd.  They saw the strikes and layoff, they rode the business cycle multiple times for the most.  They were less likely spend but after of goods times, wages raises, etc caution was naturally curtailed.

Year 2.   Press reports were talking about credit was getting harder to abtain, interest rate were going up.  At that point I had no idea what bond market was.  And the significance of bond rates going up.  But I feeling the economy was slowing.  I felt that is was a good time to go back to school and able to get federal government retraining program in hand.  But I know those people I said goodbye to, those with low seniority would gone in 8 months to 18 months will be on layoff.  For many they would face hardship and debt collecters will be calling.  This the end of the of that business cycle and cycle will start again.

A recession would come.  For me to mechanics of cycle can be described as the action of a rubber band.  Need sleep. More later.

Even a dead clock is right twice a day. Stock markets go up, stock markets go down. Comparatively speaking life is a piece of cake in North America, and those complaining about it here, need to spend some time living elsewhere, to realize how good we have it here. 

Even a dead clock is right twice a day. Stock markets go up, stock markets go down. Comparatively speaking life is a piece of cake in North America, and those complaining about it here, need to spend some time living elsewhere, to realize how good we have it here. ...

...this is kind of amusing, as I do live outside Canada in a so called thrird world country...and I can assure you that the people I work with in the tens of thousands are well prepared for the financial implosion to come......

of course you missed the point...I was not talking re markets so much as the collapse of the derivative trade holding up the system!

Financial Times; Higher bond yields fail to arrest an ever-weakening dollar

...this means an inflationary trend in the States, what with their deindustrialization/ globalization, import export deficit with China...forcing continued higher bond and treasury rates, mortgage rates and increasing corporate debt...it`s called checkmate for the financial system

January Pending Home Sales Crash Most Since 2010 by Tyler Durden Wed, 02/28/2018 - 10:09

After New- and Existing-Home-Sales have already disappointed, Pending Home-Sales just collapsed too (to the lowest since Oct 2014) to confirm January was a bloodbath for the real estate market.

Pending Home Sales plunged 4.7% in January (massively below the 0.5% expected rise in sales) - this is the biggest drop since May 2010.......

.....what with increasing mortgage rates, central bank rates (US) due to inflationary pressures, (waiting for the trade wars with China and massive inflationary effects!)...this is just a taste!

The collapsing real estate market will blow up the economic system!

So with the trade wars beginning, (meaning increasing inflationary effects throughout the economics, meaning increasing rates everywhere, increasing bankruptcies everywhere!), the VIX indicator way up...(meaning the ETF derivative index based on gambles on volatility etc.), the Japanese Central bank preparing to end its Quantitive Easing, expect further cataclysm in the markets today and going forward...we are sleepwalking to disaster here! Surely someone up there is aware?

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That's why the Bank of Canada sold off all of its gold reserves recently.

Yes, prior to this they held 100 million in gold reserves, or approximately 3.5 days of Toronto's budget alone.

That's right.  Enough gold to run Toronto for four days and three nights.

That must be a terrible setback for all those monetary-reform k00Ks who lost their minds when governments shifted from gold currency to fiat currency.

Me, I'm just glad they didn't opt for "tulip currency".  Gold was mentioned in the Bible, so it must be special.  And, it can be used for plating the connectors on an HDMI cable!  Then you can charge double for that cable, and stimulate our economy!

looks like a good time to buy!

https://www.youtube.com/watch?v=9o0rAvZtM7w

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he biggest threats to the financial establishment are the new currencies first created by individual communities and now cryptocurrencies.

Cryptocurrencies are just Digital Tulips.  There's no law against speculating in tulips.

Finally, going back to the current level of Libor, whether the reason for its sharp move is systemic or technical remains irrelevant in the context of the big picture: what is relevant as we said over a month ago, is that over $300 trillion in debt instruments which reference Libor, are now paying far more in interest than they used to, with the double whammy being the sharp spike higher, which adds to the pain from the move. Furthermore, the fact that the move wider in both Libor and Libor-OIS has been far longer than all of the so-called experts predicted, suggests that the tightening in monetary conditions is far greater than the prevailing level of the S&P suggests. Indeed, one look at the stock price of Deutsche Bank, or the blow out in bank CDS confirms this......from zerohedge

people can choose to deny reality if they so wish...there are just too many indicators out there now, that the global financial system has broken...the 2007 to 9 financial crisis, where debt levels were a fraction of today, where interest rates were high enough to promote serious financial reflationism, will feel like  a picnic in comparison as to what is to come...if you've made your preparations with your communities, fine...if you've remained in complacent denial and apathy...good luck

China Slaps Tariffs On US Imports Including Pork, Nuts And Wine.......

one more move to increasing inflation...forced increases to the market rates...increasing bankruptcies for the most indebted...a collapsing house of cards

Canada’s Five Giant Banks Ought to Be Nationalized, Not Bailed Out

Canada’s banking system is on the edge of a crisis, once again, with a collective debt of $1.8 trillion — and the public will be on the hook for most of it, sooner than most think.

Last week, the Bank for International Settlements (BIS) revealed that Canada, Hong Kong and China’s banking systems are the world’s most at-risk of a severe crisis. BIS joins the International Monetary Fund, Moody’s and S&P Global Ratings in warning record-high consumer debt could tank Canada’s “five giants” in the case of a downturn. The Bank of Canada’s Senior Policy Director, Gino Cateau, calls such debt the Canadian economy’s “key vulnerability.” The post-2008 lending surge, which boosted consumer spending to keep the economy afloat, has driven many to the edge of insolvency. Ipsos, for example, found 52 per cent of Canadians are $200 from bankruptcy by the end of an average month.

We’ve seen this before. Leading up to 2008, Canadians had about the same debt-to-income ratio as Americans. And, when the recession struck, Canada’s five giants faced insolvent borrowers and the federal government bailed them out. Most of the money came from the Canada Mortgage and Housing Corporation, which bought loans that soured, but total support peaked at $114 billion. At around seven per cent of Canada’s 2009 GDP, Canadian Centre for Policy Alternatives economist David Macdonald notes, it would’ve been cheaper to buy most of the banks.....

There ought to be a new thread...as the crisis has now fallen into collapse......

May 10 - Financial Times (Robin Wigglesworth): "The investor withdrawal from emerging markets accelerated over the past week, with equity funds suffering their worst outflows in nearly a year and bond funds losing money for a third week running - the longest streak of withdrawals since late 2016… EM equity funds had outflows of $1.6bn in the seven days to May 9, the first weekly outflow since February and the biggest since August 2017… Fixed-income funds focused on the developing world saw their outflows accelerate. Investors withdrew $2.1bn from EM bond funds, the third consecutive week of outflows and the worst one since February. EM debt funds have now suffered outflows of more than $4bn since mid-April."

Argentina, Turkey definitely are now in panic mode....Brazil, Malaysia suffering serious decline in their currency and bond yields...the collapsing EM or emerging market countries inevitably has to infect the core countries of the western financial system...this is now happening...it´s a deck of cards, one collapsing onto the next...and the timing seems to be gaining speed! 

Brazil Central Bank Intervention Fails As Real Rout Accelerates...from zerohedge

​....the crisis of the major emerging markets continues to grow...the core economy financial counterparties, must be taking a big hit right now (Deutchebank!!)

Clarity?

"I would recomend you panic"...peso pounded, lira lashed, rand routed as Emerging Markets crash...(from zerohedge)

whatever may be presently tried to keep the EM markets from crashing...they are no longer working.......all is connected.....the counterparties of the core financiers here must take the losses...this is what is clear....and it is the EM markets that will take down the system...that also is clear!

This is pessimistic? Only if we are not preparing the alternative, building community, alternatives to money systems, alternative horticulture, energy production, collectivist solutions for our needs, built on municipalism, yes!!

Global contagion from the collapse of Emerging Markets!

In fact, as Bloomberg reports, outflows from U.S.-listed exchange-traded funds that invest across developing nations as well as those that target specific countries totaled $2.7 billion in the week ended June 15, the most in over a year and more than seven times the previous week.

....as I warned recently, the counterparties in "our" financial system will be hit first!

But the situation is far more grave, generally, globally.......we are now into the 4th month of a global financial collapse....a several hundred year system doesn't turn to dust and chaos overnight...but the crisis is reaching the homefront now! Argentina, Turkey, Brazil, now Mexico, the peripheral Eastern and southern European countries...but above all China....its major corporations facing defaults on their loans what with a lack of access to more finance capital, above all from the Chinese shadow banking system...and now facing a trade war! Checkmate!

Scary stuff!

Why doesn't the left focus on helping people instead of buying into economics, which is the dismal science? No one will care what the left has to say about economics.

If anything the US dollar and US stock markets will rise as the thugs are in control for the indefinite future

Just look at the stock indices.

What are you going to do for your retirement apart from  paying off or down your mortgage

put your money in a bank deposit and you will quickly go broke taking inflation into account

Canadians need to start big time investments into blue chip stocks

Investing  in stocks has never been better

July 12 - Bloomberg (Lianting Tu and Finbarr Flynn): "A rout in China's dollar-denominated junk bonds is getting worse as mounting defaults send traders running for cover. Rising trade tensions are also adding to longer-existing difficulties created by the nation's push to cut excessive leverage.....

June has been an especially bad month for the global capitalist system...as the contagion continues to spread and deepen....Central Banks everywhere are throwing their reserves to stop the collapse of their currencies and bond markets...til they run dry.....feels like we are getting close to a flexion point of incomparable dimensions....

 "Five Surprising Outcomes of the Financial Crisis - We Learnt the Dangers Posed by 'Too Big to Fail' Banks but Now They Are Even bigger."

Tett's article is worthy of extended excerpts: "What are these surprises? Start with the issue of debt. Ten years ago, investors and financial institutions re-learnt the hard way that excess leverage can be dangerous. So it seemed natural to think that debt would decline, as chastened lenders and borrowers ran scared. Not so. The American mortgage market did experience deleveraging. So did the bank and hedge fund sectors. But overall global debt has surged: last year it was 217% of gross domestic product, nearly 40 percentage points higher - not lower - than 2007."

A fifth issue to ponder is the post-crisis retribution. Back when lenders were falling over by the dozens, it seemed natural to presume that some bankers would end up in jail. After all, there were hundreds of prosecutions after the US savings and loans scandals of the 1980s. But while banks have been hit with fines in the past decade, totalling more than $321bn, (almost) the only financiers who have done jail time are those who committed crimes that were not directly linked to the crisis, such as traders who rigged the Libor rate." Gillian Tett, Financial Times.....

...surely this is as good as it gets for a Call to Revolution!!